The Mysteries of Copyright Ownership

If there were a goldmine in your town—one that produced a worthwhile amount of gold every year and wouldn’t run out for many, many years—you’d probably expect any dispute about who owns it to have long since been resolved. It’s true that the folks who sell you real estate might not actually own it, which is why you buy “title insurance,” but real estate transactions are pretty well-recorded, so such awful surprises are pretty rare, which is why anyone would dare to offer “title insurance.” At a minimum, you wouldn’t expect two different people to be mining the gold without, you know, their coming to blows.

But this sort of thing happens with copyrights and royalty streams with surprising frequency. It can be very difficult to tell who owns a copyright. Copyrights can be sold just like real or personal property can, but you don’t need to record the sale anywhere.* True, transfers of copyright have to be in writing, but many industries that deal with copyright—I’m looking right at you, music industry—suck at keeping records.

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Jamaica, where, apparently, they didn’t do paperwork in the 1960’s.

Copyright ownership vests initially in the author, or maybe the author’s employer, or more rarely, whoever commissioned the work. But authors don’t always sign their work, and it’s not always easy to tell whether the work was “made for hire” or not. Also, as we’ve discussed recently, it’s pretty easy to accidentally give away your copyright.

* Since there are probably billions of copyrights in existence at any one time—remember, anything that is expressive and has been “fixed in a tangible medium” has a copyright—such a registry would be enormous. With modern computer storage and processing, it’s not impossible, but it would be quite an undertaking.

Worse, copyrights can be sliced and diced into all kinds of fine and interesting ways. You can sell 25% of the right to distribute copies of your work, or you can sell the right to translate your work into Polish. More commonly, you might feel you aren’t very good at making money from your work and sell the exclusive right to license the right to make and distribute copies, or to publicly perform, your right to others who are allegedly good at this sort of thing.* This can happen over an over again, resulting in a trail of ownership that can get pretty murky, especially if it’s in an industry that sucks at keeping records. Complicating matters, these rights can also pass to unwitting heirs without any documentation.

* In some industries—I’m looking at you, music industry, again—people assign their copyrights to “publishers” for the hell of it, er, because that’s how it’s always been done; I don’t care if it’s stupid; I have to go be creative now.

The consequences of these difficulties range from the annoying to the tragic. If there is a photograph depicting an important historical event shot by an uncredited free-lancer for a newspaper who has probably long since passed away, good luck finding one of the owners. If you want to use that photograph in your history book, well, too bad. Great books fall permanently out of print. Great songs are never pressed again. All because nobody knows who owns what, or even what they own.

This is the flip-side of one of modern copyright law’s great virtues: the ease with which copyright can be divided, up sold, and exploited. This reduces transaction costs. But, for some copyrights, it greatly increases the transaction costs to the point where it’s too expensive to use the copyright.*

* The old trick of waiting for the work to go into the public domain doesn’t work any more. Even assuming Congress doesn’t further extend the duration of copyright, copyrights last for about 100 years now.

Bob Marley’s Sound Recordings

In Rock River Communications v. Universal Music Group, the results are more annoying than sad. The case involves the music of Bob Marley and the Wailers. As the court delicately put it, “[I]n Jamaica in the 1960s, record keeping was not a primary concern.”* As a result, it is difficult—perhaps impossible—to definitively establish ownership of the copyrights in those songs and sound recordings.

* That’s a bit unfair on Jamaica and the 1960s. I’m not familiar with any locale or time period in which it was ever a primary concern for the music business to keep good records.

The plaintiff, Rock River, wanted to take some of Marley’s sound recordings and remix them for a new commercially-available album. To that end, it signed a license agreement with a company that claimed to own the right to license some of the Marley sound recordings. This licensing company apparently obtained its permission to license the sound recordings from Marley’s record producer. Did the record producer own the copyrights or have some right to license the copyrights? Well…

Rock River’s efforts bore fruit, and it was in the process of distributing the remixes in various ways, when the defendant, UMG, sent Rock River a cease-and-desist letter, threatening Rock River with lawsuit if it released any of the remixes. UMG’s logic was simple: it owned the exclusive right to license the Marley sound recordings; Rock River didn’t obtain a license from UMG; ergo, Rock River must be unlicensed. Too bad if it spent money on a license that was invalid. UMG then decided to be a bit of a jerk and sent letters to several of Rock River’s business partners, threatening them with legal awfulness. Those letters were very effective. All of Rock River’s partners backed out.

But wait, where did UMG get its supposed exclusive license from? It purchased those rights from another company called JAD Records. OK, but where did JAD Records get the rights from….?

Rock River’s lawsuit isn’t one for copyright infringement, strictly speaking, though it is all about copyright law. It is one for “tortious interference with prospective economic advantage,” a notoriously squishy claim that gets invoked too often but may actually be appropriate here. It’s a little hard to deny that UMG’s goal in sending those letters was to short-circuit all of Rock River’s avenues to making money from the remixes. But if Rock River never had the right to make and distribute the remixes, then there’s no harm because there never was a “prospective economic advantage.” Importantly, the burden is on UMG to prove this.*

* This doesn’t actually make sense to me. The burden is on Rock River, as the plaintiff, to prove that it has a prospective economic advantage. If there is no right to make and distribute the remixes, there’s no prospective economic advantage, so it seems to me the burden stays with Rock River. The court, however, held that all Rock River had to prove was that Rock River had a real opportunity to make some money from the remixes, and the burden of proving that the opportunity was illegal was on the defendant. Having said all that, I strongly suspsect Rock River put on enough evidence to get this issue to a jury, even if it did have the burden.

UMG had succeeded in convincing the trial court on a motion for summary judgment that, unless Rock River could prove it had the right to make and distribute the remixes, Rock River’s claim automatically failed. Once you shift the burden of proof to UMG, however, the situation reverses itself. Now it’s up to UMG to prove a negative: that Rock River couldn’t have had those rights. That wouldn’t be too hard if UMG really could prove it was the exclusive licensee of those rights, but its paper trail is no better than Rock River’s. The fact is, at this stage, nobody really knows who has the rights to license Marley’s sound recordings.

The Ninth Circuit therefore reversed the trial court’s grant of summary judgment and remanded the whole thing for trial.

So Many Questions! Also, Fun Fact About Threatening to Sue People

What if the court can’t figure out who owns the copyright in the sound recordings? Does the court just have to pick someone? Or will the sound recordings just drop out of legal existence because no one can figure out who has the authority to license them? UMG might find out it wasn’t very wise to send out those letters. Rock River has nothing to lose, but UMG might lose a lucrative revenue stream….

One final point: Generally, it’s OK to threaten people with lawsuits*, the way UMG did. This is part of something known as the Noerr-Pennington Doctrine, which, despite its funny name, is part of everyone’s First Amendment right to petition the government, including the courts. Under the Doctrine, you can’t be sued simply for filing a lawsuit or, by extension, threatening to file a lawsuit. There is an exception, however, for “sham” lawsuits. Rock River was able to uncover evidence that not only was UMG’s paper trail spotty, but UMG knew it was spotty. Also, UMG had been tolerating other companies claiming to license Marley’s sound recordings. The court held that a jury, on that evidence, could find that UMG’s threatening letters fell within the sham exception to the Noerr-Pennington Doctrine.

* This strategy works well in copyright, since the downstream distributors are also liable for copyright infringement, if their supplier is unauthorized…. Ideally, if you are going to distribute something that is probably protected by copyright, you might want some warranties and indeminification about the other party’s authority to use and license the copyrights. Just in case.

Thanks for reading!